The law of diminishing marginal productivity implies that increasing only one input will lead to smaller and smaller increases in output.
What is the law of diminishing marginal productivity?
- An economic law guiding production states that if more variable input units are utilized in conjunction with a particular quantity of constant inputs, the overall output may grow at a quicker pace at first, then at a steady rate, but eventually at a declining rate.
- According to the law of diminishing marginal productivity, increasing merely one input leads to smaller and smaller improvements in output.
- According to the law of diminishing marginal productivity, opportunity cost rises as one input is raised to produce successive units of output.
- Consider a farmer who uses fertilizer as an input in the process of growing corn.
- Each unit of added fertilizer will only minimally boost production return up to a certain point.
Therefore, the law of diminishing marginal productivity implies that increasing only one input will lead to smaller and smaller increases in output.
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